SpotiDJ

Yet another indie artist complaining about Spotify’s royalty rate on Hypebot.com But maybe we should focus more on the number of streams in stead of the payment per stream.

In a comment Joe Taylor proves this point as he quotes an article he has written for the Record of the Day magazine:

“If Spotify could pay you 100,000 euros for one track in a tiny country like Sweden, imagine how much you’d earn for a no. 1 album in a huge country like the USA once Spotify has achieved good market penetration.

Yolanda Be Cool’s We Speak No Americano is eight times platinum in Sweden (where streams contribute to their certifications). Tracks like this can get close to 100,000 streams per day at their peak, and could reach 50 million streams in total. It conceivable that one track could earn 100,000 euros in Spotify revenue just in Scandinavia – which is better than the iTunes era or even the peak of the CD single era.

“Also, while the majority of tracks in the iTunes catalogue don’t sell, the majority of tracks on Spotify are streamed, so Catchy Tunes are earning good revenues from tracks that didn’t chart when initially released. Playlists help here – Catchy Tunes have a playlist called Dancefloor Hits in partnership with Sony Sweden which has nearly 140,000 subscribers. Every Friday and Saturday evening, plays peak as people get ready to go out.”

Yet another article on this subject on Hypebot.com. This time by Scott Perry of New Music Tipsheet and entertainment industry marketing and consulting firm Sperry Media.

But this time the discussion has an interesting outcome. Scott had a talk with some folks from Spotify and this is what he posted as a comment later:

Scott Perry:

I had an amazing conversation with the folks from Spotify this morning, really helped me see all this from another angle. So I’m gonna play devil’s advocate — against myself!
I’ve been focused on my peer group, a set of hard-core music fans who are ultra-wired. And yes, their purchasing has focused more on the must-have releases, while their streaming consumption has increased.
BUT you have to realize that less than 1% of Americans use streaming services, so it is hard to tell what kind of impact streaming has truly had on purchasing habits for the country at large.
AND on top of this, streaming services are winning over age groups that have never spent a PENNY on music — you project the growth among the 20something music consumer by offering an easier, cleaner alternative to file sharing, and you can see the potential size of the market.
From what I was shown, keeping music off streaming services mainly leads to an increase in consumption via YouTube (which pays out less), P2P networks, and less savory streaming services.
And can you really measure what impact streaming has had on any of last year’s #1 sellers, or any release for that matter? Did Spotify’s 2011 chart topper, Foster the People, really suffer less sales because of more streams? Or were they able to get a larger fan base because of their ubiquity?
Conversations like this are happening at management and labels every day. How we move forward will be a delicate balance, since consumers are moving towards streaming models whether we like it or not.
The biggest challenge any of us have is to unilaterally foster the growth of this emerging revenue model, so that it grows from add-on revenue to being bigger than the revenue streams it will inevitably replace.

I have contacted Scott and asked if he can share the data he was shown. To be continued…..

For those who haven’t subscribed to the Lefsetz Letter . Here is a nice article on labels and artists pulling music from Spotify.

Every now and than Bob also emails some replies he received. Here are a few I thought I should share:

Subject: I love Spotify!

I have made my own 45s/albums/cds for about 25 years (ever since a big time manager told me back in the 80s that if I would wear some spandex and poof out my hair he would get me a deal on Atlantic-he already had some other million seller groups there and was good buddies with Doug Morris) I told him to fuck himself and started making and licensing my own stuff over in Europe…I managed to get my own record deals over there and tour for the past 25 years or so …

The most any one record of mine has sold is around 15,000 back in the early 90s…judging from the hits at my website over the years I think I might have 4,000 to 5,000 solid fans at any given time…not many but they are super loyal!…

And guess what?…for about the past year when I get payments from cdbaby (3 or 4 times a month)  1/2 to 2/3 of the money is from Spotify! …there is also money from Napster and Rhapsody and the rest from iTunes…I love Spotify man!…it’s where most of my money selling music comes from at the moment!…it isn’t alot of money right now, but it’s enough to make a car payment or half my mortgage payment every month consistenly…I’m sure I’ll make alot more from Spotify when I am able to release some fresh recordings for my fans… The sooner everything goes to Spotify/streaming the better!!!

***!!!Please don’t use my name should you print this in one of your mailbag posts!…thanks!!!***

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A week ago ago I posted a CBbaby statement that was handed to me by the band Finn Silver

I was puzzled by the unit prices for streams of the same song. Three different amount could be explained for,  the tiers Free, Unlimited and Premium, but eight different rates?

Digital Distributor Songport was kind enough to disclose that this can be accounted for by the deals Spotify has with telco’s and ISP’s like Telia in Sweden, Virgin in the UK and KPN in The Netherlands.

The good news is that these partner deals may have a positive effect on the payments per stream. Customers of  the partners get Spotify Premium for free, but they probably are not using Spotify as much as the ones who pay for it with their own money. Every month  part of the revenue from the specific partner is split by the number of streams by their customers, so artists get more per stream. Sometimes over $0.01. See the statement below.